Properly naming your company
A friend referred a new business client to me recently. I’ll call the corporation “Guys and Dolls.” Only problem is its legal name should be “Guys and Dolls, Inc.” or “Guys and Dolls Company” or something which indicates it is a corporation. Similarly, if Guys and Dolls was a limited liability company, it would need to include LLC or such in its legal name.
The owner of Guys and Dolls formed the corporation through the Colorado Secretary of State, which warns that corporate designators are required under state law but still allows a user to file without one. Guys and Dolls compounded that incorporation mistake by using the Inc-less name to refer to itself in all of its business dealings.
Inc-less names can be used properly as a trade name or trademark, but references to the entity in its correspondence and contracts need to be to its legal, corporate name. The owner of Guys and Dolls was setting himself up for lawsuits with customers and vendors who did not know the business was a corporation, but since we caught it early in the corporation’s life, Guys and Dolls’ missing Inc. will be corrected with minimal hassle.
Your business lawyer can explain not only how and when to use your corporation’s official legal name, she can help you develop guidelines for using the name, logos and marks in a manner that will protect you from lawsuits as well as protect the value of your business name, which aside from your people is your business’ most valuable asset.
More on other ways a business owner can blow the protection of a limited liability entity in a future post.